Bank for International Settlements Innovation Hub, Swiss National Bank and Bank of France collaborate for experiment in cross-border wCBDC
- The BIS Innovation Hub, Swiss National Bank, Bank of France and a private sector consortium will collaborate in a wholesale CBDC (wCBDC) experiment.
- Project will investigate the potential benefits and challenges of wCBDC in settling cross-border payments and digital financial instruments.
- Part of a series of CBDC experiments announced by the Bank of France in July 2020.
The BIS Innovation Hub, the Bank of France and the Swiss National Bank today announced that, together with a private sector consortium led by Accenture, they will conduct an experiment using wCBDC for cross-border settlement. The private sector consortium includes Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS.
The G20 has made enhancing cross-border payments a priority and laid out a multi-year roadmap to coordinate efforts. The experiment contributes to this work by exploring how wCBDC could enhance speed, efficiency and transparency in cross-border use cases. The BIS Innovation Hub facilitates central bank experimentation into technological public goods. We are excited to join this project, which complements other CBDC experiments that we are working on.
Known as Project Jura, the experiment will explore cross-border settlement with two wCBDCs and a French digital financial instrument on a distributed ledger technology (DLT) platform. It will involve the exchange of the financial instrument against a euro wCBDC through a delivery versus payment (DvP) settlement mechanism and the exchange of a euro wCBDC against a Swiss franc wCBDC through a payment versus payment (PvP) settlement mechanism. These transactions will be settled between banks domiciled in France and in Switzerland, respectively.
The Eurosystem is engaging in innovation and adapting its actions to the strong trend towards the digitalisation of payments. The Banque de France is convinced of the potential benefits of wholesale central bank digital currency to provide maximum security and efficiency in financial transactions, and opened last year an experimental programme to make progress in this area. In this perspective, we are delighted to be able to conduct an important experiment – called Jura – on cross-border settlement in partnership with the Swiss National Bank and the BIS Innovation Hub.
It is essential for central banks to stay on top of technological developments. The Swiss National Bank is already investigating the settlement of tokenised assets with wCBDC as part of Project Helvetia. We are looking forward to expanding this analysis to a cross-border context by participating in this exciting initiative.
Project Jura expands on central bank experimentation investigating the effectiveness of wCBDC for cross-border settlement. It is of exploratory nature and should not be interpreted as an indication that the Bank of France or the Swiss National Bank plan to issue wCBDCs.
About the BIS Innovation Hub
The BIS Innovation Hub (BISIH) was established in 2019 to identify and develop in-depth insights into critical trends in financial technology of relevance to central banks, to explore the development of public goods to enhance the functioning of the global financial system, and to serve as a focal point for a network of central bank experts on innovation. It complements the well established cooperation within the BIS-hosted committees. At present, there are Hub centres in Switzerland, Singapore and Hong Kong SAR. In the coming months, new centres will open in Toronto, London, Frankfurt/Paris and Stockholm. The BIS has also formed a strategic partnership with the Federal Reserve System in New York.
About the Bank of France
The Bank of France is a member of the Eurosystem, which groups together the European Central Bank and the national central banks of all countries that have adopted the euro. The Bank of France has three main missions: monetary strategy, financial stability and services to the economy. With regard to monetary strategy, the Bank of France plays a crucial role to prepare and implement the decisions of the ECB's Governing Council; it plays a dual role of protection and supervision in conjunction with the French Prudential Supervision and Resolution Authority to ensure financial stability; it offers a wide range of services to companies and individuals.
About the Swiss National Bank
The Swiss National Bank conducts the country's monetary policy as an independent central bank. It is obliged by the Constitution and by statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.